Neil Woodford launched an investment strategy platform this week called W4.0. The former fund manager will design portfolios that investors can copy and customise by removing any stocks they don’t want.
This is more than just a paper portfolio or a blog with stock tips. Subscribers will be able to download a trade file to give to their broker or investment platform and will receive updates whenever Woodford changes or rebalances his portfolios.
The first three strategies are: All Rounder (income and growth); Unstoppable Trends (growth ideas, tapping into global trends); and Income Booster (a yield of at least 7%).
Woodford is looking for 500 founding members to join a wait list, who will receive lower fees.
Who might join?
Some investors and financial advisers won’t want to touch Woodford with a barge pole, particularly those who lost money when Woodford Investment Management collapsed in 2019.
Yet there will be others – perhaps those who know Woodford personally so are less swayed by negative press coverage, or people who made a lot of money in his UK equity income funds during his heyday at Invesco – who believe he can still add value with his contrarian stance, macroeconomic insights and decades of experience.
If the price to join his new investment community is low enough, there will be those who sign up out of curiosity, to see which stocks he picks and compare his ideas to their own portfolios.
Yet there are easier ways to emulate the portfolios of professional fund managers, if that is what you wish to do.
You could pick a few successful fund managers and find out their top 10 holdings from their factsheets. Granted, this won’t give you a complete portfolio like Woodford is offering, but if you want that, you could just buy their funds.
Or for those seeking a multi-asset solution, several platforms offer model portfolios using funds as building blocks and there are many multi-asset funds to choose from as well.
If you want to marry all that with some insights from Woodford or you are curious about what he is thinking, you could read his views for free on his blog, Woodford Views.
Will W4.0 be successful?
A critical question as this new platform gets off the ground is whether W4.0 will be giving investment advice to retail and DIY investors and, if so, will it obtain the regulatory approval to do so.
The next question is why Woodford is launching W4.0 at all, given that he could retire and run money for friends and family, and the new business model is unlikely to be hugely lucrative.
My sense is that the clue is in the name. W4.0 sounds like a reincarnation.
Perhaps if the strategies Woodford designs are successful, in five or so years’ time the media may refer to him as a ‘portfolio strategist’ or an ‘investment guru’ rather than ‘that disgraced former fund manager’.
Financiers have risen phoenix-like from the flames of blow-ups before.
For instance, Steve Cohen’s hedge fund SAC Capital pleaded guilty to insider trading charges in 2013 but Cohen, who was not convicted, transitioned SAC into Point72 Asset Management the following year.
Point72 began life as a family office but started accepting external capital in 2018. The alternative investment firm has become extremely successful and in July 2023 it surpassed $30bn in assets under management.
Woodford himself is still innocent until proven guilty and is contesting the Financial Conduct Authority’s findings against him. Meanwhile, he wants to continue working and doing what he loves. With W4.0, he appears to have found an innovative way to do that.